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Commentary on The Capital Markets- Category [Editorial]
2017-05-23 12:25 by Karl Denninger
in Editorial , 356 references
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There is this ugly and pervasive "political" view that Islamic Terrorism is some "new thing."  It usually comes with some line of crap about how we've "created" these monsters by invading their nations and displacing "their" people, and that "we" (the western world generally) are responsible.

This is a bald lie.

Islamic terrorism dates back centuries.  It was a problem in the form of piracy and slavery in the early days of our Republic -- long before we had a military that could invade anything.  The "big lie" is proved again in the present by these people attacking nations that have formally eschewed any sort of association or funding for any sort of "military adventurism."  Yet they get blown up and shot just the same.

The root of the problem is not complicated.  Their very "holy book" proclaims that one who is not Muslim has, in fact, three and only three choices: Slavery, conversion or death.

In the United States we have Freedom of Speech.  It's written into our Constitution and in fact is the first freedom guaranteed in the Bill of Rights.  In "muslim" nations blasphemy is typically a serious crime.  It is one thing to look askance at someone who says "God doesn't exist"; it is quite another to throw them in prison.

Similarly "slandering a prophet" is frequently a crime.  It is a fact that Islam's "holiest" prophet took children as his wives, and yes, that's plural.  Leave polygamy out of it for there are arguments for that if you're trying to "be fruitful and multiply"; nobody in the modern world believes that marrying a child is acceptable and yet to merely speak critically of such behavior with regard to certain people in these nations is a criminal offense.

Our so-called "muslim nation partners", including Saudi Arabia, criminalize homosexuality.  It is a criminal offense for which one can be imprisoned for years or even killed.  Some of these nations also practice female genital mutilation: they cut off the clitoris of young girls so as to deny them sexual pleasure at any time in their life.

It is true that the majority of the victims of islamic terror are in fact muslims.  That's because there are two "branches" or "sects" of Islam and they hate each other with a white-hot passion.  This more than occasionally has led to wars and various forms of terrorism over the millennia.  Is it any surprise that such terrorism often hits muslims when there are two branches that hate one another with enough passion to kill?

You can look through the Bible of both Christian faiths and the Old Testament of same (commonly known as the Pentateuch) which is functionally the same as the Jewish Torah, and find various demands for ostracism given certain behaviors or worse.  If you're unfamiliar with where to find such prohibitions and declarations of punishment look in Leviticus 20 for starters -- there's a nice list there.  But those faiths grew up over time and with damn few exceptions none make argument for actual execution or imprisonment for same in the modern world.

Muslims have refused to grow up, in short.

They've only had 1,000 or so years to do so and have continually refused including state-level actors such as Saudi Arabia while time and technology have marched on and replaced spears, sailing ships, cannon and longbows with modern firearms, howitzers, missiles, chemical, biological and nuclear weapons and more.  The religiously insane are no longer limited to taking lives one at a time; they can now put together concoctions and wear them into a stadium, murdering dozens.  It is only a matter of time before some of these nutjobs come up with enough fissile material and sufficient ability to fashion a crude nuclear device at which point you can be assured they will use it.

At what point do a civilized people demand that this madness stop?  And with what force are we willing to demand that it does?  I argue the time has long passed to say "enough damnit" and put forward the premise that if you support this ideology -- not just with money but with your judicial system in any form or fashion then civilized people are done with all who hold such views and all of their enablers.

Let's bring this into the present and our current multi-billion dollar technology companies.

Neither Twitter or Facebook will ban a user for espousing that someone who insults a prophet or religion, specifically in relationship to Islam should be KILLED.  Even a fairly-specific threat to murder a specific person if that someone doesn't "stop" maligning a religious practice or belief does not cross their lines.

Folks, if you are making possible the continued operation of these firms by your presence and use of them then you are contributing, in a real and present sense, to the spreading of this hate and the religious ideology that it is acceptable to kill persons who disagree with a given view of a particular religion or religious person.

This makes YOU PERSONALLY RESPONSIBLE in part for what just happened in Manchester; you made possible the recruiting, you made possible the gloating and you make possible here, now and today the communication channels that these people use to churn themselves and others into the frothy madness that then results in the murder of innocent people by suicide bombers.

You further this activity by being on Facebook, Instagram and Twitter by providing them with the market capitalization and advertising revenue that they rely on to exist.

Facebook and Twitter, among others, have decided that selling advertising targeted at savages who threaten to murder those they disagree with is more important then your life and you personally and continually approve of that decision by being part of their "user base" -- which is all they have to sell to the advertisers that make their operation as businesses possible.  They could instantly banhammer anyone who levels such a personalized threat but they refuse and you allow them to continue to refuse by funding their madness right alongside the islamic nutjobs.

Deal with it because those concert-goers blood is on your hands.

And yeah, this means that's now my message and purpose for being on both.  To make sure people understand that they are fomenting and furthering terrorism since these firms will not remove the accounts of those who express such threats.

I have personal experience with this when I ran my ISP (MCSNet) in the form of a different but somewhat-related "ethnic difference."  I had users from one "side" on my system -- who were welcome despite having "very strong" views and expressing them regularly -- right up until they posted an actual threat to commit a violent unlawful act.  Then they were done -- no second chances, no maybes, no ifs ands or buts.  Done, baked, account gone, terminated, finished.  Period.  Yes, this meant that I never again got a nickel from anyone "on that side" of the "debate."  That's the choice when it comes down to it: You either do the right thing or you sell yourself and your users for blood.

No, this doesn't mean we should bomb all these people back into the stone age -- until and unless they bomb or shoot at us.

But it does mean that civilized people must hold social media and realted firms accountable in full for their continued provision of tools and technology used to foment violence and froth these nutjobs into a state of mind where they will murder either individually or en-masse with a vest full of homemade explosives.  Those firms who refuse to immediately cancel accounts for blatant threats that inherently disrespect our very First Freedom must be driven from the marketplace of free ideas and markets.

Further, on a national level it does mean no trade with those nations that refuse to act on this same principle -- period.  No deals.  No immigration or "refugees."  No visitors, no ships, no nothing leaves their airspace or borders and I don't give a damn how much money you have or who's ass -- or hand -- you kiss.  We burn any bonds they bought in the past on the South lawn in a ceremony of peace.  In a world in which a "simple" ship full of alleged goods could instead have a makeshift nuke in the cargo hold, any land vehicle can be packed with explosives and any aircraft can (and some have) be carrying a bomb that kills all on board and perhaps many on the ground there simply is no argument remaining for allowing any passage of material or persons across the borders of such "nations" onto the land and airspace of civilized people.

While we should and in fact must not seek war, if those who refuse to respect human rights at the most-base levels want war then we'll give them war.  But they should be warned -- someone who has declared they will murder simply because someone prays the wrong way, insults a prophet or eats a ham sandwich has declared that they lack the capacity for critical thought and thus has become inimical to humanity as a whole.  Since they not only threaten to blow up or shoot anyone who disagrees they've repeatedly demonstrated they mean it if they demonstrate that they cannot be persuaded otherwise through peaceful means via direct and hostile action the choice of either "shoot them now or let them shoot us later" looks pretty obvious from my point of view.

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2017-05-19 06:00 by Karl Denninger
in Editorial , 361 references
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Robert Mueller has been named special prosecutor for the "Russia investigation" with regard to Trump's campaign.

Mueller, a former FBI head and federal prosecutor, is well-respected by both sides of the aisle -- and with reasonably good cause.  I'm aware of no material accusations of misconduct during his tenure and he has a reputation for being honest -- and tough.  He has also worked with Comey before -- extensively.  The conflict of interest issue is obvious -- and, from the point of view of the DOJ, irrelevant.  You take from that whatever you wish.

In my view of events this is generally good in that it will lead to a dispositive outcome.  If, as Trump asserts, there were no untoward actions by his campaign, his staff and those close to him during the campaign or afterward with regard to Russia then the Democrat narrative will be demolished and laid rest in a pile of ash.

However, if there is evidence of obstruction or worse, actual collusion of some sort with the Russians then all Hell is going to break loose.

The problem for those who are preening for a "Trump Trade" is that either outcome leaves such a trump-trade expectation in the dustbin.

Let's assume that the now-being-repeated video that "there was no obstruction" proves up.  So what? The Democrats are not going to let this go and will argue they've been railroaded.  Now what?  Anything that has to go through regular order is not going to happen and remember that due to how the process works under reconciliation you have to get the AHCA, or whatever it turns into in the Senate, through before you take up taxes since you can't score the tax bill otherwise.

If there was collusion, on the other hand, then Trump is burnt toast and it makes zero difference who in his campaign did the colluding.  Whether it was him or anyone else in his campaign if there's any sort of fire to go with the smoke his administration is finished in practical terms even if they don't impeach him (and the Republicans won't, by the way, so you can forget about that.)

Finally either way the House is likely to flip Democrat in 2018.  This is just math; the party in power nearly always loses seats and frequently loses the majority after the first two years of a new administration where the Presidency changes hands.  The day that happens you can forget about passing anything having to do with actual tax cuts and I remind you that the 2018 mid-term campaigning is due to start pretty much as soon as Congress comes back from summer recess!

If you think there will be tax reform given the present environment you need to get the crack pipe out of your mouth as you are a drug-addled fool.  Trump had the opportunity to get this done, and to fix health care (for real; see my proposal to the top right) but he simply does not have the luxury of time into a midterm election in which he is nearly-certain to lose seats in the House and probably will lose the House majority.

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2017-05-17 11:05 by Karl Denninger
in Editorial , 468 references
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Let's take three at once here.

First, the alleged Comey Memo.  If that memo is real -- that is, if there really was a conversation between Trump and Comey in which he tried to talk Comey out of investigating Mike Flynn then there's real trouble brewing.  What's worse is that from reports thus far it appears the memo does exist.

That's impeachable.  It might, depending on the context, also be Obstruction of Justice, but I strongly doubt that it's able to be prosecuted without some sort of attendant threat.

It's not criminal to say that someone's a "good guy" and ask if an investigation can be concluded.  It becomes criminal if there's a threat communicated that is linked to the statement and no, the fact that you can fire someone doesn't make the statement into a threat.

So this is probably not an actual crime, but remember that impeachment is a political remedy, not a criminal one and therefore whether someone can be indicted is neither required or necessary.  It just happens to be a bar that, if you can jump it, makes impeachment far more likely to succeed.

Politically it would be suicidal for the Republican Party to support an impeachment over this issue and thus they won't, provided it stands alone and nothing else of substance appears that is linked to it.

Where the calculus changes immediately and irrevocably is if there is more; that is, if there is actual proof of some sort of collusion with the Russians within the Trump Administration or transition team and this memo proves up.  There is a monstrously-deranged set of views that this "must" exist somewhere, somehow among the Democrat party and although being unable to find and prove it up they cling to it like the hard-right clings to their bibles and anti-gay rhetoric.  Both sorts of irrational garbage are equally destructive, by the way and this one is literally tearing the Democrat Party apart.

I will note that there is no evidence at all for this sort of link as things stand right now and I don't believe it exists either based on the data that is in the public but if it emerges then Trump is burnt toast.

Second, on the so-called classified data allegedly given to the Russians in the meeting in the Oval Office.  So what?

Folks, there are two non-issues here.  First, the President can declare anything, classified or not, sharable with anyone he wishes.  I remind you that Obama did this repeatedly with various foreign state actors in the context of terrorism.  Second, in that context I'd hope the President would do so if it advances the cause of catching or killing those jackasses.  Nobody said a single word when Obama did the same thing, and the reason for it simple: It not only isn't illegal or improper it's expected and normal.  If you're deranged enough to go after Trump on this then you might want to consider consuming a whole bottle of Drano, as doing so would measurably improve the collective IQ of the country.

Finally, Seth Rich.  Over the last few days there have emerged claims that Seth Rich just prior to being murdered did send tens of thousands of emails to Wikileaks.  I remind you that when Seth was alleged shot in a "robbery" not one thing was taken from him.  I said at the time that this alleged "robbery story" stunk to high Hell and it now appears evidence is emerging that he in fact was the leaker to Wikileaks on the DNC materials and thus the odds are extremely high, given the proximity of his murder to him doing so, that he was murdered because someone found out that he had done so.  This is very plausible and it required only that someone was watching him at the time.

If Seth Rich was murdered for leaking DNC materials to Wikileaks then he was politically assassinated and that points straight back at the Clintons, Obama and the DNC generally.

That, my friends, should be the story here.

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2017-05-14 08:25 by Karl Denninger
in Editorial , 602 references
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I hate having to use this....


It wasn't that long ago that I wrote a few articles on the hubris of our government thinking they were the smartest people in the room when it came to computer hacking.  I pointed out that while we undoubtedly have very smart people working for the NSA and other three-letter agencies so do other nations and their people, along with "unaffiliated" folks who are just plain old-fashioned troublemakers, are equally smart.

Indeed, that was the focus of an article from 10/2014 in relation to one of Comey's brain-farts in which he implored Congress to basically force back doors into US-made equipment and software.

Now we get treated to the outcome without the force first, because the NSA was writing that code anyway and a group of crooks got their hands on it, perverted it to force cryptolocker software on computers and is spamming it all over the globe.

How did they get their hands on it?  That's the subject of much debate. Many are pointing to the "all Russians, all the time" narrative run by many in the so-called "security industry" (including some who have been caught lying in the past) along with half the left-leaning idiocracy parade that makes up most of the mainstream media punditry.

A more-plausible explanation is that it was an inside job, although in reality it doesn't matter because the entire point is that no matter how good you are someone's equal or better and thus whether they work for you or someone else it only takes one such person with their own motives and you're toast.

What we do know is that the "weaponization" of this apparent NSA code took mere hours after the password to the encrypted archive was posted publicly.

There's another key point here though that nobody in the media is talking about and yet it's the key point when it comes to this particular aspect of cybersecurity:

I have also said repeatedly that nobody in their right mind runs "packaged" software, say much less "cloud based" software, for critical system purposes from places like Microsoft or any of the other big vendors.  Why?  Because there are too many damned cooks in the kitchen, too many of them are incompetent and will drop a rat in the stew pot whether on accident or otherwise and too many shortcuts will be taken.

Witness Android and the repeated security problems found in its mediaserver component.  One, two, over all these years, ok.  But no! It seems that every time a new month rolls around there's another one - or six.  Exactly how many years has Google had to rewrite Android and get that horse**** out of there permanently?  Yet they haven't done it, probably never will and you have no way to compel them to do so.

Windows?  Same deal.  I've been raising hell about problems with "security" under Windows since the time of NT 3.51 which dates back to when I ran MCSNet and in fact that, plus it's resource-piggishness and baroque and impossible to audit internal code was why Microsoft's attempt to get me to port my back office systems to it resulted in their entourage being summarily dismissed.  That's roughly 20 years ago now!  Yes, I had an NT 3.51 and then 4.0 system in my building at MCSNet.  One.  It's sole purpose in life was to run Pagemaker to do prepress work (color seps and similar) for hard-copy circulars and similar and it had no access to our internal, mission-critical systems.  Yes, I'm serious.  Why the hell do you need "antivirus" software on a system unless it fundamentally blows big fat ones to start with?

It is absolutely essential that you write your own damn code for serious applications which will screw you if they're compromised, keep it close to the metal so the attack surface is small and can be audited, keep the development group responsible for it small so you can vet all of those people yourself and keep control of it in-house so you can audit and fix it FAST if you find -- or even suspect -- something is going wrong.  And yes, contrary to the howls of protest from all the IT and public company screaming you hear daily on CNBS, at trade shows, in seminars and elsewhere this means you cannot buy any of the "software as service" offers from any vendor ever nor can you use any of the "kit" rapid-development systems pushed by many for any such mission-critical application and be "reasonably safe" because every damn one of those firms and alleged "solutions" has hundreds or even thousands of people, none of whom you can personally vet, who not only wrote the freaking code but in the case of anything in the "cloud" they also have administrative access to the machines!

Violating these rules is why upwards of 50,000 entities have been staring at screens demanding Bitcoin ransoms be paid "or else" including, apparently, systems at both FedEx and England's National Health Service!

This isn't the first lesson on the consequences of American (and in fact world-wide) arrogance when it comes to this subject and I predict it also won't be the last.

Let's hope the next lesson doesn't come in the form of something aimed a bit more-precisely than a shotgun-style blast of cryptolocking extortionware.

And oh by the way, if you're wondering how this thing was contained it was simple dumb luck.  There are a number of organizations, including Microsoft, trying to at least weakly spike the football. Uh uh.  A researcher noted a host address (DNS target) in the malware that was unregistered and he registered it himself in an attempt to track the infection process; he surmised the code would "ping home" there which would give him a nice map of all the systems it got into as it progressed.  What he uncovered by accident was a "stop button" in the code and when he registered the domain and thus the DNS lookup succeeded the malware stopped trying to infect other systems.  The next round of this fun will almost-certainly either have the "stop button" stripped out of it or made far more complex to trigger.

In the meantime if you're a business or government and you are running mission-critical say much less "highly important" software on Windows or similar systems, you have said systems written using any of the so-called "rapid development" toolkit packages out there (there are too many to count these days) or worse you're running said mission-critical systems "in the cloud" on someone's software as a service offering, you are an idiot and when, not if, you get nailed by something like this you deserve it as you've been fairly warned, including by me, with a clear documentary record going back years.

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2017-05-10 09:40 by Karl Denninger
in Editorial , 585 references
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The Leftside screamfest on Comey's firing is amusing.

Let's look at this, and what I've said before on Comey and the email issues.

First, for the FBI director to issue what amounts to an indictment in public and then recommend no indictment is something that I had never seen before -- and said so.  That was clearly a political decision, not a law-enforcement one.  You simply can't lay out all of the elements of a criminal offense, which I remind you Comey did (and I reported on at the time) and then say "oh, but no reasonable prosecutor would bring a case" and have that be anything other than politics.

That, standing alone, was enough to get Comey canned, and Obama should have done it instantly.  But he didn't.

What appears to be icing on the cake, however, was Comey's apparent false testimony that Huma forwarded hundreds or even thousands of classified emails to Weiner.  He made that statement under oath and was forced to retract it in a letter -- apparently the truth is that there were only a couple.

Why does this matter?  Quite clearly it does; there's a huge difference between accidentally doing something and intentionally and maliciously doing it.  Intentionally feeding an uncleared person classified information, which is exactly what Comey's testimony sounded like coupled with a failure to recommend an indictment of Huma was a clear declaration of political interference with law enforcement.

As it turns out that wasn't what happened at all.

Was that likely responsible for accelerating or simply confirming a decision already underway?  Yes.  I believe that's exactly what happened.

There is an extremely serious issue in the FBI today when it comes to political interference with law enforcement.  We saw it repeatedly during Obama's term; Fast-n-Furious, which resulted in multiple deaths, including one of our own border agents and countless Mexican citizens yet led to no charges, a clear and apparent violation of the law when it comes to Hillary and her staff which also led to no charges and more.

Nowhere is this more-serious in terms of its economic impact, however, than in the health care arena where it is my considered opinion that literal hundreds of thousands of violations of 15 USC are committed daily by actors in that sector and yet not one investigation say much less prosecution has taken place.

Is this all at the feet of Obama?  Hell no.  The FBI has ignored that issue for a literal 30 years!  Never mind what certainly looked to me like bank fraud when it comes to all the robosigning and other games played with deeds and records, all of which was intended to, and did, induce banks to make loans and sell paper that in fact were worthless.

Comey had to go -- and that he kept putting his schwantz in his own mouth on national television was a national disgrace repeated time after time for anyone who cared to look.  That doing so screwed this person or that depending on which day it was doesn't surprise.

Is this "the dawn of a new age" when it comes to the FBI and its leadership?  I doubt it.  But at some point you have to take the clumsy political hack and cut his head off on television even if the only thing you do to replace him is find someone who's a political hack but can engage his brain first.

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